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South American Soy Season Off to Good Start

Although the specter of another La Niña weather event hangs over the South American growing season, crop prospects are looking good right amid rapid planting progress in Brazil and improved moisture conditions in Argentina.

The favorable South American conditions may cap any seasonal rebound in soybean futures as the U.S. harvest winds down.

Brazil’s soybean planting season is off to a strong start following good rains across most growing areas in early October. Producers made rapid planting progress last week under dry conditions.

Brazilian consulting firm Safras & Mercado estimated 21% of Brazil’s soybean crop had been planted by Oct. 21, ahead of last year’s pace of 15% and a five-year average of 13%.

Safras estimated 40% of the crop had already been planted in the top soybean state of Mato Grosso, compared with an average pace of 24%, and pegged progress in the No. 2 producing state of Parana at 38% against an average of 20%.

Last week’s dry weather depleted soil moisture across west-central and southern Brazil and extreme weekend temperatures of up to 100° F may have caused some crop stress in the driest areas, but significant rains are expected to halt the drying trend this week.

This week’s rainfall will be "perfect in restoring favorable soil moisture and perpetuating a good start to crop development" according to private forecaster World Weather Inc. which sees all of Brazil receiving rainfall at one time or another over the coming week to 10 days.

Soybean planting is just getting underway in neighboring Argentina and won’t really get going until November, but meteorologists say recent rains have set the stage for a smooth planting season.

A dry September caused some corn planting delays and stressed Argentina’s 2011-2012 wheat crop, but October has been a wet month in Argentina's central crop belt.

"The central growing area has gotten enough rain to sustain the improvement in soil moisture that happened in the first 15 days of the month," German Heinzenknecht, a meteorologist at the Applied Climatology Consultancy in Buenos Aires province told Reuters News Service.

"Over the week ahead, we could see more showers," he added. "Conditions really are favorable in terms of soy planting being able to advance without a lot of problems."